The group's operating revenue growth by in the first nine months of 2020 was mainly driven by the inclusion of the life insurer Vita in the Group, expansion of freedom of services business written by Zavarovalnica Sava in EU member states, and greater volumes of Slovenian non-life business and international reinsurance business.
The net expense ratio improved by 1.6 p.p. year on year, also as the result of the integration of Vita into the Group, which operates at an even more favourable expense ratio compared to other Group members.
The group generated a net profit of EUR 47.6 million, an increase of 26.4% year on year. About EUR 9.9 million of this increase came from the acquisition of Vita, consolidated in the Group accounts as from 31 May 2020. Without the effect of Vita, the Group's net profit would broadly be at the same level year on year. The nine-month net profit reached 95.2% of the full-year target set in the 2020 revised plan.
The return on the investment portfolio in the first nine months of the year was 1.7%, which is 0.3 p.p. above the plan. The portfolio of predominantly highly rated government and corporate bonds has been fairly resilient to financial market volatility.
The rating agencies Standard & Poor's and AM Best affirmed the "A" (excellent) insurer financial strength ratings of Sava Re. The outlook in both instances is stable.